For those of you not averting your eyes from the financial crisis (I wish I could, but keeping up with the current economy is part of my job description), you might have noticed that January was, well, not as bad as most experts thought it would be.  The drop in the rate of inflation was slower than expected, retail sales increased, and Britons are still swiping their plastic despite reports that consumer confidence has bottomed out. 

But from doom-and-gloom media reports to the increasingly pessimistic outlooks of economic know-alls, you would hardly know that January was, in many ways, actually not all-that-bad.  Well, okay, it wasn’t great either – but it was by no means apocalyptic, and an optimist might argue that the momentum of the economic pendulum is slowly swinging in the other direction. 

I’m by no means suggesting that the recession isn’t going to be as severe and prolonged as experts are predicting.  For all we know, the pick-up in January was simply a blip, and once reports are released at the end of February, we’ll be even worse off than we were in December.  But all this has got me thinking about how heavily a factor psychology can play during any recession.  Why are we so eager to accept negative news and foreboding forecasts, to expect the worst rather than hope for the best?

Not to mention that, to really dig ourselves out of this economic mess, we are all collectively going to have to adopt more positive spending habits.  We are so worried about the state of our personal finances in the short-term – and rightfully so – that we are finding it impossible to adopt an attitude suited for the long-term.  It’s like a worldwide hangover; the best cure is a coffee, shower, and some fresh air, but we’d all rather bury our heads under our pillows. 

Certainly, a negative attitude is definitely a way to protect yourself from further disappointment.  I understand why people are preparing for the worst – in more and more cases, people’s livelihoods are at stake.   

So what can we do?  What mantras are worth repeating during a recession?  And how do we draw the fine line between ignorant optimism and unnecessary pessimism?  Though I’m no stranger to a serious bout of economic depression every now and then, I find certain phrases worth repeating when I get the credit crunch blues.  And with that, I give you, humble reader, my essential proverbs for surviving a recession.    

‘We got ourselves into this mess – and we’ll get ourselves out’:  Any honest look back at what got us into this mess must take into account the bad habits that we all shared: spending beyond our means, taking out more credit than we could realistically pay back, and wanting too much too soon.  But recognizing these things means nothing if we choose not to learn from them.  And learn we will!  There’s hardly a better way to change old habits than to realize that your personal finances, and personal security, are at stake – a point that us personal finance bloggers know well. 

‘It could be worse . . .’ :  So things are pretty bad right now, a fact that newspaper headlines remind us of mercilessly – ‘Mortgage lending at 34-year low’, ‘Interest rates at historic lows’.  But it really could be worse.  Unemployment reached 25% in the US at the height of the Great Depression, and the emotional and economic devastation of an ill-timed natural disaster could potentially make our squabbling about late mortgage payments look like chump change.  Okay, so it might not be especially consoling to compare things right now to the Great Depression or the destruction brought on by a hurricane.  But things have been worse.  And we’ve picked ourselves up before.

‘What doesn’t kill us makes us stronger’:  When all is said and done and the current recession is but a thing of the past, our economy will be stronger and more secure than ever.  New protections will be put in place to protect consumers from the poor choices made on Wall Street.  Though further recessions are inevitable, we will look back to previous recessions for guidance on market recovery and rehabilitation. 

‘Better late than never’:  It’s true – we should’ve seen it coming.  But we didn’t, at least not early enough to stop the market from haemorrhaging.  Ah, but we HAVE (see what I’m doing here – a little game of point-counterpoint never hurt anyone).  We might think the end is nigh, but a new beginning is just around the corner.  Though we might pay a higher price for having taken so long to redress our spending sins, we should be so happy to have learned our lessons before things got even worse! 

‘The best things in life are free’:  This one is worth repeating even when we aren’t in the midst of an economic crisis, though truly appreciating the simpler things in life is especially helpful at the moment.  Am I not the only one who is overcome by a huge wave of relief when I think, and I mean seriously think, about how true this proverb is?  I don’t know about you, but mortgages, loans, and debts really tend to shrink in importance when I take the time to remind myself about my family, friends, and health.  Oh boy, here comes that warm feeling all over again!  Do you feel me?

I’m sure there are more proverbs where this came from.  Care to share?  What helps you stave off a full blown economic depression?